Mehabe score: 5 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Fredun Pharmaceuticals Ltd is engaged in manufacturing of various pharmaceutical formulations for pharma companies in India and across Africa, South-East Asia and CIS countries and Latin America. It is also in the business of healthcare and aims to be a holistic healthcare provider.[1]Site:539730Main Symbol:FREDUN
Stock trades at 506.0, above its 50dma 449.04. It also trades above its 200dma 410.09. The stock remains bullish on techicals
The 52 week high is at 637.00 and the 52week low is at 240.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
-‘s median sales growth is 29.11% of last 10 years
Weakness
– Stock is trading at 4.69 times its book value
– has a low return on equity of 8.06% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.5x. Fredun Pharma trades at the industry’s max P/E of 46.02x. 539730 trades at a P/E of 46.0x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. 539730 has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is -2.4%. The max 1- month return was given by Amrutanjan Healt: a return of 16.83 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 54.76 cr compared to Rs 33.6 cr for period ended Sep 2020, a rise of 63.0%
Operating Profits reported at Rs 4.08 cr for period ended Sep 2021 vis-vis 3.4 for period ended Sep 2020 .
Operating Margins contracted -266.8 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 4.61 compared to Rs 0.83 for previous quarter ended Jun 2021 and Rs 2.08 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 188.0 cr for period ended TTM vis-vis sales of Rs 134.0 cr for the period ended Mar 2021, a healthy growth of 28.7%. The 3 year sales cagr stood at 24.7%.
Operating margins shrank to 6.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 4.0 cr for period ended TTM vis-vis sales of Rs 2.0 cr for the period ended Mar 2021, rising 50.0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -11.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to 8.0% over the last 3 Years. – The stock has given a return of 83% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is 69% vis-vis a compounded sales growth of 31% over the last 3 Years. – The compounded profit growth on a TTM basis is 154% vis-vis a compounded profit growth of 16% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.0% vis-vis 0.0% for Jun 2021 – Public shareholding has fallen for the period ended Sep 2021. The Sep 2021 public holding stood at 40.77% vis-vis 46.08% for Jun 2021
Conclusion
– is expected to give good quarter
-‘s median sales growth is 29.11% of last 10 years – Stock is trading at 4.69 times its book value
– has a low return on equity of 8.06% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 449.04 and is trading at 506.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
